Q4 2015

Transcription

Q4 2015

REAL ESTATE SERVICES
DUBAI REAL ESTATE
MARKET OVERVIEW
Q4 2015
FOREWORD
ADIB Real Estate Services comprises a comprehensive real estate banking and advisory platform
providing the full range of professional services from a single provider. Our services include: Real
estate financing
Strategic development
Investment
Asset
Valuation
advisory
advisory
management
Project
management
Agency
Market
research
Property
management
Facilities
Management
REPORT HIGHLIGHTS
Residential
During Q4 2015, approximately 2,000 new units were added
to the residential market, taking the total supply to around
481,000 units, an increase of approximately 3% year-on-year.
We expect approximately 13,500 new units to enter the
market during the course of 2016. Prominent developments
expected to complete during 2016 include Meydan Heights
South development located in District 11 of Mohammed
bin Rashid City, Millennium Estates at Meydan, low rise
residential towers in City Walk and Al Habtoor City.
Overall, average apartment sales rates dropped by 9% year-onyear and 2% quarter-on-quarter while rents remained healthy
during Q4 2015 recording a marginal decline of 1.8% quarteron-quarter and a single digit decline of 4% year-on-year.
Average villa sales rates declined by 5% quarter-on-quarter
and 12% year-on-year while average villa rents dropped by
5% year-on-year and less than 2% quarter-on-quarter.
Office
During 2015, prime office rents remained broadly
stable, while offices in secondary and tertiary locations
recorded a marginal drop of 3% year-on-year. In terms
of office sales, values across major freehold office
locations registered a drop of 13% year-on-year.
Over 445,000 sq.ft. of office space was transacted
during Q4 2015 at a total value of circa AED0.59
billion as compared to 900,000 sq.ft. of office space
with a total value of AED1.26 billion in Q4 2014.
Over 6.0 million sq.ft. of new office space entered the
Dubai market in 2015, taking the total office stock to circa
90 million sq.ft. Approximately 60% of the new supply
delivered during 2015 is located in Business Bay, Dubai
Design District and Dubai Investment Park areas which
2
together added 4.1 million sq.ft. of new office space.
Circa 4.5 million sq.ft. of new office stock is scheduled
for delivery in 2016, which could lead to further deflation
in office rents. However, much of the impact is likely
to seen across secondary and tertiary locations.
Retail Sector
Dubai’s organised retail stock grew by 8% year-onyear reaching 34.8 million sq.ft. GLA (gross leasable
area). The only new retail addition during Q4 2015 was
Dragon Mart 2 offering a total GLA of 1.7 million sq.ft.
Rents across prime retail centres remained stable during
the year whilst a number of secondary retail centers,
struggling to maintain a healthy retail mix, witnessed
a drop in rents in the range of 7-10% year-on-year..
Hospitality Sector
Dubai’s hospitality stock rose by 1.7% from the previous
quarter with an addition of 1,709 new hotel rooms and
apartments during Q4 2015, taking total hotel room stock
to circa 98,000 rooms and apartments.
During Q4 2015, the Dubai’s hospitality market welcomed
new brands, Versace, St.Regis, Steigenberger and Hilton
Garden Inn, which have setup base in Dubai’s ever
burgeoning hospitality market.
With supply outstripping demand, the hospitality sector
continues to record a decline across all key performance
indicators. Average occupancy levels for the full year 2015
dropped by 3% while ADR’s dropped by 10.2% compared to
the same period last year.
MPM PROPERTIES FACTS AND FIGURES
160+
TOTAL UAE STAFF
35+
LEASING & SALES STAFF
95+
30+
PROPERTY MANAGEMENT STAFF
No.1
LARGEST ABU DHABI
MAINLAND PORTFOLIO
23,500+
UNITS UNDER MANAGEMENT
90bn
COMBINED MARKET VALUE OF PROPERTIES
VALUED SINCE JANUARY 2012
ADVISORY STAFF
1,700
LANDLORD CLIENTS
20+ 98.5%
DEDICATED VALUATION
PROFESSIONALS
OCCUPANCY RATE
7,600+
MORTGAGE VALUATIONS
SINCE JANUARY 2012
CONTENTS
Dubai 2016 Outlook 4
Demand Drivers10
Macro Trends 12
Residential Sector14
Project Focus22
Office Sector26
Retail Sector30
Hospitality Sector32
Definitions & Methodology
34
Contact Information35
Supply - Photo Gallery
36
Development Location Map
37
3
Q4 2015
| DUBAI REAL ESTATE MARKET OVERVIEW
DUBAI 2016 OUTLOOK

Signs of a maturing market: the Dubai real
estate market is currently under-going a much
needed global competitive correction after
yielding strong back to back annual capital
appreciation since 2012. For the market, this
course correction is beneficial in the medium
to long term perspective as it sets its eyes
beyond Expo 2020. The real estate market
isn’t creating significant excess supply within
the established segments; but seeking new
growth avenues by widening the spectrum of
property offering; such as the much needed
affordable housing market. Market confidence
in the regulatory environment also remains
strong, which bodes well for future investment.

Yields continue to be attractive: Many real
estate asset classes are still offering net yields
greater than other investment products
available in the market and or superior in
comparison to yields available globally (after
factoring for inflation).

Long term economic growth intact: Dubai’s
economy is driven by tourism, consumer and
government spending.
1.
2.
4
Tourism: 14.2 million tourists visited
Dubai in 2015 with over 77 million
passengers passing through the
international airport, making it one of the
busiest hubs in the world. It is expected
to continue growing its air traffic and
passenger volumes. The city is actively
working towards creating new demand
attractors which are likely to spur tourist
arrivals and extend their length of stay.
Key projects scheduled to complete in
Q4 2016 include the much anticipated
Dubai water canal, IMG Worlds of
Adventure, Motiongate, Bollywood Parks
and Legoland. This will underpin tourism
activity in Dubai in the coming years.
Hospitality: The medium term outlook
for the hospitality industry remains
positive on the back of increasing tourist
projections and as the new investments
into Dubai’s tourism infrastructure
begins to bear fruit. Like 2015, the initial
half of 2016 may prove operationally
challenging; however, the industry
expects a stronger and much improved
performance during the second half of
2016. 2016 demand is expected to be
driven from the GCC and Asian markets.
3.
Government spending: has witnessed a
12% increase year-on-year with special
emphasis on infrastructure and social
development projects. This spending and
its related benefits will trickle down to
the private sector as well and is likely to
have a multiplier impact on the Dubai
economy. Foreign investors are likely to
take cues comfort from the government
spending outlook as well.
4.
Diversification of economic activity
towards a knowledge economy and
innovation continues; with substantial
investments directed towards energy,
space, education, healthcare, transport
and water. These investments will create
new jobs in these sectors which will in
the short to medium term drive demand
for commercial real estate.
5.
Economic uncertainty due to falling oil
prices persists within the market. This has
somewhat dented consumer confidence.
However, growth and job creation within
the focus sectors stimulated by the Dubai
government will, in the short to medium
term, help boost consumer confidence.
6.
Expo 2020: Development activity leading
to Expo 2020 is expected to commence
from 2017 onwards. This will be a strong
driver creating demand for various real
estate offerings, especially housing.
Q4 2015
Residential Outlook
MAJOR UPCOMING PROJECTS:
2016 NEW SUPPLY
13,500 UNITS
2,200
• Millennium Estates
476
• Mira Villas
632
• City Walk Residential Complex
c.600
RENT PERFORMANCE
-10%
to
-6%
-10%
-5%
to
0%
0%
to
5%

-10%
to
-6%
10%
In 2016, developers are likely to be cautious with respect to
launching new units and completing construction of launched
projects)
Developers are responding to strong demand for affordable
housing which has resulted in substantial increases in
construction activity in areas such as Arjan, Dubailand,
Jumeirah Village Circle and International Media Production
Zone 9

Demand

Government spending on infrastructure projects in
preparation for Expo 2020, will help stimulate job creation
and underpin demand for housing in Dubai

Investor demand: In relative terms there will be stronger
demand for completed properties versus off plan during 2016
as active investors focus on income producing assets offering
strong rental yields

Investors with capital are adopting a wait and watch approach
over the short term, targeting only distress sales for the time
being

Current rental levels in sub-prime areas are providing
attractive investment opportunities with yields above 8%
being obtained, particularly for smaller units

SALES PERFORMANCE
5%
to
10%
Supply and demand

UNITS
• Meydan Heights South
Affordable properties with attractive post hand over payment
plans and waiving of registration fees will attract demand
from residents who have been long term tenants and are
considering a switch to owner occupation
-5%
to
0%
0%
to
5%
5%
to
10%
-10%

10%
Tenant demand will continue to be strong, particularly for
smaller units as tenants seek to economize on their existing
accommodation budgets
Performance

The outlook for oil prices remaining low will sustain weaker
investor sentiment and a continuation of lower transaction
volumes; with capital values coming under further downward
pressure

Looking at the forecasted supply of new units and continued
economic uncertainty, we anticipate capital values for
apartments to remain relatively firm as compared to villas,
as investors generally tend to look for low ticket investments
during tougher economic cycles

Secondary locations are likely to outperform prime locations
as occupiers and investors give more weight to affordability
and rental yields over location in their decision making
Development Opportunities

The extension of the Red line will create demand for
properties along the proposed route. Key developments to
look out for include Al Furjan, Jumeirah Golf Estates and
International Media Production Zone

Affordable residential units priced between AED 600-700
per sq.ft. targeting mid-income households (with monthly
incomes of AED12,000-15,000), are currently lacking in the
market
5
Q4 2015
DUBAI 2016 OUTLOOK
Office Outlook
2016 NEW SUPPLY
4.5 MILLION SQFT
RENT PERFORMANCE
-10%
to
-6%
-10%
-5%
to
0%
0%
to
5%
SQ.FT.
• Onyx Towers
813,000
• Dubai World Trade Centre District
180,000
• Butterfly Towers
205,000
• West Wing 8
194,000
SALES PERFORMANCE
5%
to
10%
-10%
to
-6%
10%
-5%
to
0%
0%
to
5%
-10%
5%
to
10%
10%
Supply and demand

High vacancy rates and weak demand for offices in
some secondary locations is leading to a number
of developers with planned office developments
reviewing their schemes and seeking to obtain
permission for alternative uses
We anticipate that demand will remain subdued across
the office market in 2016 with companies taking a
cautious approach to expansion and / or relocation
plans
The majority of requirements will be for small to midsized offices of less than 500 sqm driven by new startups and migration of tenants to newly established
locations offering attractive rental terms. Larger
space tenants will have strong negotiating power with
the ability to secure attractive rents and lease terms
Office properties across locations such as Business
Bay, Tecom C and Jumeirah Lakes Towers will continue
to attract new tenants, due to attractive rental rates
being offered across varied options
Performance

6
Rents in Grade A properties in prime locations are
likely to see modest growth in 2016 given the lack of
availability and low vacancy rates within this segment
of the market. Conversely rents in secondary and
tertiary locations will see rents decline with supply
outstripping demand during the course of 2016

Capital values across freehold locations are likely to
see a further decline, as close to 40% of the expected
supply for 2016 is strata owned

Design and build” offices for large corporate occupiers
who require bespoke and specific design specifications
are currently short in supply

Affordable offices in upcoming areas along the Metro
Red Line expansion

Focus on infilling established commercial areas with
good transport links and ample parking, such as
Business Bay and JLT with single ownership buildings
Q4 2015
Hotel Outlook
2016 NEW SUPPLY
C. 7,500 ROOMS
OCCUPANCY RATES
-10%
to
-6%
-5%
to
0%
0%
to
5%
1004
• Ibis One Central
588
• W Hotel - Al Habtoor City
384
• The Address Boulevard
200
AVERAGE DAILY RATE (ADR)
5%
to
10%
-10%
KEYS
• The Westin Hotel - Al Habtoor City
-10%
to
-6%
10%
-5%
to
0%
-10%
0%
to
5%
5%
to
10%
10%
Supply and demand

Circa 7,500 new hotel rooms and apartments are
expected to enter the Dubai market in 2016 which
will further impact on key hotel performance
indicators

Department of Tourism and Commerce Marketing
(DTCM) of Dubai is targeting new growth locations
such as Asia, in order to promote Dubai as a tourist
destination in the Eastern markets

The completion of a number of leisure developments
(Riverland Dubai, IMG Worlds of Adventure,
soft openings of Legoland, Bollywood parks and
Motiongate theme parks in Dubai) will boost Dubai’s
hospitality sector in 2016, especially Q4

We envisage a reduction in ADR’s by 4-6% year on
year, as hoteliers react to falling occupancy rates
and competition from historic tourism hot spots,
especially around the Mediterranean, which are
witnessing a revival as tourists seek out cheaper
options closer to home

The mid-market segment (3-4 star properties) will
continue to perform strongly due to a rise in the
flow of tourists from developing economies and the
emergence of new source markets

Hotel developments in vicinity to planned theme
parks with a family focus

Budget hotels in secondary areas along the growth
corridor of Expo 2020 and adjacent to established
commercial locations as companies seek to
economise the cost of their business trips
Performance

We forecast a fall of 2-3% in occupancy rates
across Dubai year-on-year in 2016 as a result
of a decline in tourists from key markets, rise in
supply and a stronger dollar that makes Dubai
comparatively expensive to competing cities
7
Q4 2015
DUBAI 2016 OUTLOOK
Retail Outlook
2016 NEW SUPPLY
C. 3 MILLION SQFT
564,000
• The Pointe
1,464,000
• Festival Centre Expansion
38,000
• The Avenue - Phase 2 City Walk
463,000
RENT PERFORMANCE
-10%
to
-6%
-10%
-5%
to
0%
0%
to
5%
SQ.FT.
• Dubai Mall Expansion
OCCUPANCY
5%
to
10%
-10%
to
-6%
10%
-5%
to
0%
0%
to
5%
-10%
5%
to
10%
10%
Supply and demand

Demand for retail space will remain strong across prime
assets despite slower sales, however, secondary assets may
see tenant demand decrease as retailers monitor market
conditions closely
We expect the subdued demand witnessed in 2015 from
international shoppers to continue in 2016 as the US Dollar
remains strong making Dubai comparatively expensive to
shop relative to Europe and Asia, however, demand from
regional shoppers is projected to remain consistent
the year as retailers in secondary locations struggle with
ailing demand from overseas shoppers

Many retailers liquidated surplus stock over the next 12
months in over to reduce risk in a forecasted slow year, thus
reducing prices in order to attract regional shoppers with
lower prices

Luxury retailers will witness the biggest falls in sales in
2016, whereas we forecast that the sales of service goods
will remain constant as regional shoppers support sales

Softening rentals, especially in secondary locations may
serve to attract retailers seeking to create a presence in the
Middle East, especially Dubai
Performance

8
Prime assets are witnessing a stabilization of rents as
retailers forecast flat sales levels Y-o-Y for 2016 and some
retailers will now evaluate consolidating some of their
lesser performing stores

We anticipate that prime rents will come under downward
pressure as market conditions provide tenants with
comparatively stronger negotiating positions

Secondary assets will continue to see rental deflation over

Development of community retail along the Expo 2020
development corridor, to support of new residential
projects, hence benefiting from captive catchment
populations
Q4 2015
The Muraba, Palm Jumeirah
9
Q4 2015
DEMAND DRIVERS
GOVERNMENT INITIATIVES
ATTRACTING ENTREPRENEURS; IMPROVING EASE OF DOING BUSINESS

His Highness Sheikh Mohammed bin Rashid Al Maktoum,
Vice President and Prime Minister of the UAE and Ruler of
Dubai, approved Dubai’s budget of AED46.1 billion for the
fiscal year 2016 with an operating surplus of AED3.4 billion
and more than 3,000 new jobs being created for Emiratis.
The biggest share, representing 74% of total revenue is
expected to come from fees and fines, 19% from tax and
only 6% from oil. In terms of expenditure, (AED16.9 billion)
representing 37% of the total budget is set aside for social
development which includes health, education, housing and
community development

His Highness Sheikh Khalifa bin Zayed Al Nahyan, President
of the UAE, announced details of a plan worth more than
AED300 billion for innovation projects. Most of the funds will
be focused on developing alternative energy, with AED128
billion allocated for investments in clean energy projects,
AED72 billion for renewables, AED40 billion for aviation
research, AED20 billion for the space industry, AED31 billion
towards enhancing science research and AED12 billion to
establish innovation incubators and academic research
centres
REAL ESTATE AND CONSTRUCTION
STRONG INVESTOR INTEREST FOR LARGE AND SMALL ASSETS

Dubai Healthcare City Authority and Nshama have formed
a joint venture to develop Al Fursan, a mixed use project
in Phase 2 of Dubai Healthcare City. The development,
spread over a land area of 2.9 million sq.ft., comprises of
apartments, serviced residences, four and five star hotels
along with retail and leisure facilities

Palma Development has appointed Khansaheb to build
Serenia Residences on Palm Jumeirah. The project comprises
250 residential units, ranging from one to four bedroom
apartments and penthouse suites. The project is expected
to be completed in 2017 at a cost of AED 1.5 billion

Al Futtaim Carillion won the main construction contract
for Phase 2 of the Dubai World Trade Centre District
project. Phase 2 of the development comprises two Grade
A office towers of 8 and 12 storeys with a gross floor area
of 535,000 sq.m. The project is scheduled for completion
in Q3 2017

Nakheel Properties has awarded AED 819 million contract
to Trojan General Contracting and National Projects &
Construction LLC for the construction of their Palm Tower
project on Palm Jumeirah. The Palm Tower will comprise
504 fully furnished residential units ranging from studios
to three bedrooms and a 290 room five star hotel with a
rooftop infinity pool, restaurant and viewing deck
Q4 2015 KEY EVENTS
10

GITEX Technology Week - 18th to 22nd October 2015

The Big 5 – 23rd to 26th November 2015

Gulf Food Manufacturing – 27th to 29th October 2015

Indian Property Show – 1st to 3rd December 2015

Dubai International Motor Show – 10th to 14th November 2015

China Product Fair – 8th to 10th December 2015
Q4 2015
TRANSPORTATION
IMPROVING ACCESSIBILITY AND REACH TO DUBAI; CREATING JOBS

Dubai International Airport handled 6.25 million passengers in
October 2015, up by 4.4% compared to 5.98 million passengers in
October 2014. Year to date passenger traffic increased by 11.2% to
64.95 million passengers, up from 58.41 million passengers during
the same period last year
in intersections and traffic signals, as well as access to the
development from Hessa Street

Jumeirah Village Circle has budgeted AED27 million to be spent
on road infrastructure improvements which are expected to
start in 2016. The infrastructure project would see improvement
The Road and Transport Authority (RTA) has announced a AED404
million package to upgrade the Airport Road. The road package
involves upgrading major intersections and construction of bridges
and tunnels, which will increase capacity by an additional 5,000
vehicles per hour
FREEZONES
SIGNING UP NEW TENANTS; CREATING EMPLOYMENT OPPORTUNITIES

Shinhan Bank of South Korea has setup an office in Dubai
International Financial Centre (DIFC),its 98th branch worldwide.
The bank’s branch will provide financial services to businesses in
the UAE and the wider Middle East region

General Electric Aviation (GE Aviation) opened a first of its kind
‘Middle East Aviation Technology Center’ in the Dubai Airport
Freezone. The center acts as a regional customer support hub
and also supports customer operations by leveraging data
analytics, domain experience and software capabilities, enhancing
productivity and performance

Underwriters Laboratories (UL), the international safety testing,
certification and inspections company has relocated its regional
headquarters from Dubai Airport Freezone to the newly formed
Dubai Science Park (DSP), a free zone community dedicated to
facilitating and fostering growth of the UAE’s life sciences industry

Eurofragance, a leading Spanish fragrance company has opened
a 1,000 sq.m. facility in the Dubai Science Park (DSP) located off
Umm Suqeim Road (D63). The facility includes a state of the art
laboratory, evaluation suite and sales and marketing office

Accor Hotels is set to open Ibis One Central, the largest Ibis hotel
in the GCC region in mid-January 2016. The 588 room Ibis One
Central is located next to the Dubai International Convention
and Exhibition Centre and will feature food and beverage venues
including WOK & Co and Cubano-Lito Bar & Grill

Al Ahli Holding Group announced plans to build a Fox branded
theme park and resort in Dubai. The theme park is planned over
a 4 million sq.ft. area and will include Fox-owned creations
including Rio, Predator and The Simpsons. The project is expected
to open by mid-2020
TOURISM INITIATIVES

The Department of Tourism and Commerce Marketing (DTCM)
has opened its first South Korean office in Seoul. The new office
will help in promoting Dubai as a destination ultimately leading
to growth in South Korean tourists to Dubai

Dubai Safari Park located in the Al Warqa area of Dubai is
expected to open in 2016. The park which is built at a cost of
AED150 million, covers a land area of 119 hectares and will house
1,000 animals from around the world, including 350 rare and
endangered species
11
Q4 2015
MACRO TRENDS
DUBAI GDP SHARE BREAKDOWN BY ECONOMIC SECTOR - AS AT Q4 2015
6%
Trade
5%
Real Estate & Construction
28%
Transportation
11%
Manufacturing
Financial Sector
13%
Government Sector
Hotels & Restaurants
21%
Other
16%
Source: Dubai Chamber of Commerce,
Dubai Statistics Center, and IMF
8
7
6
5
4
3
2
1
0
2.5
2.0
1.5
1.0
0.5
0.0
2008
2009
2010
2011
Population
2012
2013
Growth Rate
2014
Growth Rate (%)
And Household Size
Population (Millions)
DUBAI POPULATION (GROWTH & HOUSEHOLD SIZE)
2015
Household Size
Source: DED & Duabi Statistics
DUBAI CONSTRUCTION
ACTIVITY %YOY
DUBAI CPI VS RENTAL
CONTRIBUTION TO CPI Q4 2015
25
120
20
15
%YoY
10
5
100
0
-5
-10
-15
Construction
Source: DED & Duabi Statistics,
IMF & MPM Properties Research
12
CPI
Jan-15
Jan-14
Jan-13
2015e
2014
2013
2012
2011
2010
2009
2008
2007
2006
GDP
Jan-12
80
-20
Housing CPI
Source: Duabi Statistics
Q4 2015
INVESTOR ANALYSIS
DUBAI LAND TRANSACTIONS
QoQ% CHANCE
12,000
30,000
80
10,000
25,000
60
8,000
20,000
6,000
15,000
4,000
10,000
2,000
5,000
Value (in Millions)
Transactions
DUBAI LAND TRANSACTIONS
VOLUME vs VALUE
40
20
0
-10
-30
0
0
2012
2013
2014
2015
2012
2013
2014
2015
Sales Value (BnAED)
Sales Transactions
Sales Transactions
Source: DLD, DED and MPM Properties Research
Source: DLD, DED and MPM Properties Research
TOP NATIONALITIES INVESTING IN DUBAI PROPERTY IN 2015
Value (AED' Billions)
30
25
20
15
10
5
0
UAE
India
United
Kingdom
Saudi
Arabia
Pakistan
Iran
Canada
Kuwait
Jordan
Qatar
TOP LOCATIONS - RESIDENTIAL TRANSACTION VALUE
Transaction Value
(AED' million)
1,200
1,000
800
600
400
200
Business Bay
Jumeirah
Village
Dubai
Sports City
Arabian
Ranches
Palm
Jumeirah
Jumeirah
Beach
Residence
Q4 2015
Jumeirah
Lakes Towers
Q3 2015
Dubai
Marina
Downtown
Dubai
Emirates
Living
0
Source: DLD
13
Q4 2015
RESIDENTIAL SECTOR
RESIDENTIAL SUPPLY

During Q4 2015, approximately 2,000
new units were added to the residential
market, taking the total supply to around
481,000 units, an increase of approximately
3% year-on-year. Around 57% of the new
supply was across the freehold developments
of International Media Production Zone,
Sustainable City, Dubailand Residences and
Jumeirah Village Circle
options (off-plan and completed properties)
has led to developer incentives including
extended payment plans and waiving of the
4% property registration fee

Compared to the previous three quarters, the
off-plan property market remained relatively
quiet during Q4 2015, with only 2,000
units released to the market across seven
developments. Weaker demand combined
with a varied availability of investment
Based on our research and site inspections,
we expect approximately 13,500 new units
to enter the market during the course of
2016. Prominent developments expected
to complete during 2016 include Meydan
Heights South development located in
District 11 of Mohammed bin Rashid City,
Millennium Estates at Meydan, low rise
residential towers in City Walk and Al
Habtoor City
RESIDENTIAL SUPPLY BY UNITS 2013-2017
YoY
600
500
400
300
200
100
0
1.9%
3.1%
2.0%
0.4%
2.1%
2.7%
0
8.5
3
14
1.1
10
0.2
2
3
10
14
443
452
469
479
481
495
2013
2014
2016F
2017F
Existing
Q1-Q3
Q4
2015
2015
Supply Villas
Supply Apartments
Source: MPM Properties Research
14
469
+% YoY
4
Q4 2015
SAMPLE OF RESIDENTIAL UPCOMING PROJECTS
LOCATION
PROPERTY NAME
Jumeirah Lakes Towes
Dubai Star
Business Bay
Volante
Al Sofouh
Hiliana
Business Bay
Safeer Tower 1
International City
Indigo Spectrum 2
Arjaan
Siraj Tower
Arjaan
Syann Park 1
Dubai Marina
Escan Marina Tower
Palm Jumeirah
Azure Residence
Al Quoz
Al Khail Heights
Meydan
Grand Views
Mohammed Bin Rashid City
Meydan Heights South Villas
SAMPLE OF ANNOUNCED PROJECTS IN Q4 2015
NAME OF PROJECT
Wardha
TYPE
DEVELOPER
LOCATION
Apartments
Nshama
TownSquare
Maple 2
Townhouses
Emaar
Dubai Hills Estate, Mohammed Bin
Rashid City
Arabella Phase 2
Townhouses
Dubai Properties Group
Dubailand
The Address Residences
Dubai Opera
Apartments
Emaar
Opera District - Downtown Dubai
The Ritz
Apartments
Danube Properties
Al Furjan
Alef Residences
Apartments
Al Sharq Investment
Palm Jumeirah
Anantara Residences
Apartments
Seven Tides
Palm Jumeirah
15
Q4 2015
RESIDENTIAL SECTOR
APARTMENT SALE PRICES

Overall, average apartment sales rates dropped
by 9% year-on-year and 2% quarter-on-quarter.
Secondary locations of Dubai Silicon Oasis,
International Media Production Zone, Dubai
Investment and Dubai Sports City recorded a
modest drop of less than 5%. Rental yields of
over 8%, completion of community facilities
and ongoing infrastructural improvements
are attracting investors to these locations and
helping maintain relatively healthy demand
During the last quarter, transaction activity for
off-plan properties remained relatively low as
investors focused on distressed finished products.
High loan-to-value (LTV) ratios as compared to
off-plan properties, attractive mortgage rates and
healthy rental returns are a few of the demand
drivers that are motivating investors and helping
to maintain sales values of completed properties
Weakening demand for off-plan properties has
resulted in developers offering rental guarantees,
extended payment plans to include posthandover and waiving of property registration
fees in an attempt to improve sales

Within the affordable segment, Q4 2015 saw
the launch of the Ritz Residence, a fully furnished
apartment project within Al Furjan, with a
starting price of AED430,000 for studios while
Nshama launched Al Wardha tower in its Town
Square development with a starting price of
AED590,888 for one bedroom apartments

During Q4 2015, a total of 2,606 apartments
were transacted as compared to 2,562
transactions in Q3 2015, representing an increase
of 2% quarter-on-quarter. However, in value
terms a decline of 26% was recorded with total
value dropping from AED4.25 billion in Q3 2015
to AED3.13 billion in Q4 2015, according to the
data sourced from the Dubai Land department

Despite an overall decline in transaction values,
locations such as Palm Jumeirah, Dubai Sports
City, Jumeirah Lakes Towers and Jumeirah Village
have recorded positive growth with a total
transaction value reaching AED1.49 billion in Q4
2015, compared to AED1.1 billion in Q3 2015, an
increase of 27%
-13%
-12%
-5%
2,500
2,000
1,500
1,000
500
0
1,325
-10%
The Greens
-4%
1,360
-8%
Jumeirah Beach
Residence
-8%
1,300
-11%
Business Bay
-8%
1,475
YoY
Dubai
Marina
-1.9%
1,590
-4.6%
The Views
-3.7%
1,650
-5.4%
Palm
Jumeirah
-2.2%
1,850
-1.5%
DIFC
-1.3%
2,050
-2.4%
Old Town
-3.2%
2,250
QoQ
Downtown
Dubai
AED/sq.ft.
APARTMENT AVERAGE SALES PRICES (Q4 2015)
AND PERCENTAGE CHANGE
16
Q4 2015
APARTMENT RENTS

Overall average rents remained healthy during Q4 2015 recording
a marginal decline of only 1.8% quarter-on-quarter. In year-on-year
terms, the decline was 4% compared to an increase of 10% in 2014

The older non-freehold residential areas of Deira, Karama and Bur
Dubai have comparatively outperformed freehold locations with
rates dropping by less than 3% year-on-year. Much of this decline
has been associated with ageing properties and properties that are
lacking professional property management

was recorded in Al Barsha which has seen rates dropping by 10%
year-on-year. Average rents for a two bedroom apartment in this
area in Q4 2015 were at AED90,000-110,000 per annum compared
to AED100,000-125,000 per annum in Q4 2014

The emergence of new supply across Dubai, along with the
availability of greater choice has resulted in an overall decline in
rental levels. The steepest decline in rents within leasehold areas
During the last quarter, properties across affordable freehold
areas of Jumeirah Village, International Media Production Zone
and Dubai Sports City witnessed strong tenant demand which
has resulted in rental levels being sustained, despite the delivery
of new stock. Attractive rental rates, availability of greater choice
and opening of community facilities have been the driving force for
residents to migrate to these locations
APARTMENT AVERAGE ANNUAL RENT (Q4 2015)
STUDIO
1 BEDROOM
2 BEDROOM
3 BEDROOM
OVERALL QoQ
CHANGE
OVERALL YoY
CHANGE
Business Bay
69
88
125
168
-1.50%
-3.20%
DIFC
80
115
160
220
-1.30%
-1.30%
Discovery Gardens
49
68
93
–
-0.49%
0.75%
Downtown Dubai
74
113
155
220
-2.08%
-5.54%
Dubai Marina
68
98
143
198
-1.06%
-4.78%
Greens
70
90
133
163
-0.91%
-5.38%
International City
38
49
73
–
0.00%
0.37%
Jumeirah Beach Residence
80
103
133
178
-0.91%
-3.16%
Jumeirah Lake Towers
65
88
120
155
-2.22%
-2.22%
Palm Jumeirah
–
125
163
200
-0.81%
-1.60%
60
83
108
143
-1.92%
-4.51%
PROJECT
TECOM
(AED thousands per annum)
17
Q4 2015
RESIDENTIAL SECTOR
VILLA SALE PRICES

Average villa sales rates across freehold villa
communities declined 5% quarter-on-quarter
and 12% year-on-year. However, opening of
community facilities across new developments
and further announcements of infrastructure
improvements has aided in mitigating
additional rate declines

According to data sourced from the Dubai
Land Department, approximately AED1.35
billion worth of villas and townhouses were
transacted during Q4 2015, a drop of 7.5%
quarter-on-quarter and 22% year-on-year.
Arabian Ranches, Palm Jumeirah and Emirates
Living (Emirates Hills, Meadows, the Lakes and
Springs) remain active areas accounting for
67% of the total value of transactions

Other active areas during the quarter were
Jumeirah Park, Al Furjan and Jumeirah Village
accounting for an accumulated transaction
value of AED288 million over 99 transactions.
Jumeirah Park, a community offering circa
2,000 villas recorded a total of 41 transactions
in the last quarter at a value of AED183 million,
equating to an average rate of AED4.48 million
per property

Over 3,750 new villas/townhouses are
expected to enter the freehold locations of
Meydan, Arabian Ranches, Mohammed Bin
Rashid City and Dubailand during the course
of 2016. These new properties are expected
to further elevate vacancy rates and exert
downward pressure on sales values over the
short to medium term. However, established
locations are expected to see minimum impact
as a result of new supply
AVERAGE VILLA SALES PRICE AED/sq.ft. Q4 2015
QoQ
-2%
-2%
-1%
-3%
0%
-4%
-1%
0%
YoY
-5%
-12%
-11%
-9%
-9%
-3%
-10%
-13%
2,500
1,210
1,180
1,175
1,100
1,075
950
Dubai
Sports City
Arabian
Ranches
Jumeirah
Park
Springs &
Meadows
Jumeirah
Village
Al Furjan
500
1,350
1,500
1,000
The Lakes
2,000
2,575
AED/sq.ft
3,000
Palm
Jumeirah
0
18
Q4 2015
VILLA RENTS

Average villa rents dropped by 5% year-on-year
and less than 2% quarter-on-quarter

Al Furjan, Jumeirah Village and Jumeirah Park
developments registered the highest drop in
rents by over 10% year-on-year. However,
limited supply, planned infrastructure and retail
developments will help in maintaining rental
stability over the course of 2016

During the last quarter, the majority of leasing
enquiries have been towards mid to high end
villas with typical budgets between AED170,000
to AED300,000 and limited enquiries for luxury
villas. Considerable supply of new villas over
the past 15 months across the mid to high end
segment has provided tenants with greater choice
along with increased bargaining power reflected
by landlord offering incentives
AVERAGE VILLA ANNUAL RENT Q4 2015
PROJECT
2 BEDROOM
3 BEDROOM
4 BEDROOM
5 BEDROOM
QOQ
YOY
–
165
–
215
-2.22%
-10.29%
Arabian Ranches
153
190
260
305
-1.91%
-6.47%
Dubai Sports City
–
183
200
295
-0.45%
-3.46%
Jumeirah Park
–
–
255
285
-5.74%
-14.34%
140
155
183
–
0.00%
-7.96%
Meadows
–
225
250
295
-3.70%
-9.07%
Palm Jumeirah
–
345
450
500
-3.57%
-9.65%
130
178
–
–
-2.31%
-7.47%
Jumeirah Islands
–
–
315
375
-3.00%
-9.01%
Jumeirah Golf Estates
–
295
325
400
-0.51%
1.63%
Al Furjan
Jumeirah Village
Springs
(AED thousands per annum)
19
Q4 2015
NON-FREEHOLD VILLA VALUES Q4 2015
25.0
AED (Million)
25
20
17.8
15.0
15
11.5
8.5
10
5
6.3
10.5
9.0
8.0
0
Mirdif
Al Barsha
High
Low
6.8
4.5
4.0
Umm Suqeim
Al Warqa
Average
Note: For villa sizes ranging between 4 to 7 bedrooms
AED (Thousands)
NON-FREEHOLD VILLA RENTS Q4 2015
300
230
250
200
150
290
275
145
160
180
255
225
220
190
185
155
100
50
0
Mirdif
Al Barsha
4 Bed
3 Bed
Umm Suqeim
Al Warqa
5 Bed
AED / Sq.ft.
NON-FREEHOLD LAND VALUES Q4 2015
1,000
900
800
700
600
500
400
300
200
100
0
950
800
450
350
500
400
400
280
Mirdif
Low
Al Barsha
High
20
650
600
550
Average
Umm Suqeim
340
Al Warqa
Q4 2015
21
Q4 2015
PROJECT IN FOCUS – JUMEIRAH GOLF ESTATES
Jumeirah Golf Estates is one of the Middle East’s most prestigious residential
golf communities, offering a wide range of world-class golfing facilities and
individually designed homes.
The master development is spread over a 1,119
hectare land area and incorporates 16 residential
communities, comprising of more than 1,700
constructed and under construction properties.
Jumeirah Golf Estates’ premium residential
proposition is underpinned by a host of facilities
providing residents with a community centric
lifestyle, including two championship golf courses
- Fire and Earth and a state-of-the-art Clubhouse
with a variety of dining options.
The development is located off Sheikh
Mohammed bin Zayed road (E311) and only
minutes away from the site of Dubai Expo 2020
and Al Maktoum International Airport.
Every year, Jumeirah Golf Estates plays host to
the DP World Championship Tour – The Season’s
Finale to the European Tour’s Race to Dubai, which
draws in more than 65,000 visitors from across
the globe. The Race to Dubai celebrates both the
diversity and the shared passion for golf across
the globe. The 2015 European Tour International
Schedule presented 12 months of enthralling
tournament action featuring 48 tournaments in
27 countries worldwide.
Statement from Jumeirah Golf Estates
In the past year, we have seen the market
dynamics change with an increase in demand for
affordable housing in the mid-market sector. That
being said, whilst there has been a shift toward
affordable housing enquiries, we have also seen a
steady interest in luxury market underpinned by
location, quality and offering.
In our experience, we have seen demand for both
affordable homes, as well as luxury developments,
as this is being driven by customer needs. It is
important as a master developer to cater to both
sectors of the market and ensure we are offering
the very best in real estate options for our
customers as the market landscape matures.
Looking towards the future, the World Expo
2020 offers an exciting opportunity for owners
22
and residents in the vicinity of the EXPO site.
The economic impact generated by the Expo
between now and 2021 will be approximately
US$19.6 billion – much of this value is expected
to be retained within the region. Creating an
estimated 275,000 jobs in and around the region
to service the Expo, across sectors including
tourism, aviation, construction and real estate,
engineering and infrastructure, logistics and
transportation, and hospitality and retail. Overall
the positive halo effect of the Expo 2020 Dubai
will leave behind a strong transformative social
and economic legacy that will open more doors to
strong investment and partnership opportunities
across the MEASA region, as a result of this spill
over an increased demand for the real estate
sector will be generated.
Q4 2015
Residential Communities
Jumeirah Golf Estate comprises of 16 residential
communities, of which eight are developed and
marketed by individual private developers and the
rest by Jumeirah Golf Estates.
Fire and Earth courses. Features include traditional
Tuscan-style architecture and materials including
terracotta pavers and travertine and stone tiles

Flame Tree Ridge: 94 Tuscan inspired villas in
eight different architectural styles and a variety of
interior colour schemes
The communities developed by Jumeirah Golf
Estates include:

Redwood Avenue: 47 individually designed five
and six bedroom villas with uninterrupted views
of the Fire Course

Juniper Way: 70 prime plots overlooking the Fire
course offering developers the chance to design
dream homes

Redwood Park: 75 three to four bedroom
townhouses offering fairway views of the Fire
Course

Wild Flower: 94 plots surrounding the Earth
Course, positioned adjacent to the Clubhouse,
offering views of Dubai’s skyline

Whispering Pines: A collection of 158 three and
four bedroom villas, each offering views over the
Leisure & Sports Facilities
Outdoor Facilities

Flame Tree Restaurant and Grill

Jogging & cycling integrated with the surrounding landscaping

Swirl Bar & Lounge

Gym, swimming & tennis facilities

Fresca delicatessen & café

Landscaped gardens and public parks

Race to Dubai Suite

15 lakes and an array of wildlife and foliage

Extensive Terrace areas

Direct views of two golf courses

Swimming Pool

131,000 square-feet Clubhouse

Children’s Swimming Pool

Events Lawn

Men’s Locker Rooms with Jacuzzi and Steam Room

Ladie’s Locker Rooms

Boardroom

Retail Shop

Pool & Snooker Tables

Tennis Courts

Fully Equipped Gym

Dance/Aerobic studio
23
Q4 2015
PROJECT IN FOCUS – AL ANDALUS
Al Andalus is the most recent residential launch with a collection
of 674 affordable apartments and 54 townhouses.
The development occupies over 10 hectares and
offers views of the golf course. There are five
water features spread over six hectares along
with open space. The development benefits from
landscaped gardens, and a series of 15 lakes
running through the heart of the community.
Residential Offering & Prices:
UNIT
SIZE (SQ.FT.)
STARTING PRICE (AED)
One bedroom
728-904
597,000
Two bedroom
1,370-1,741
1,161,000
Three bedroom
1,770 – 2,053
1,510,000
Four bedroom
2,353 – 2,943
–
Payment Plan
The developer offers an attractive payment plan targeted towards mid-income individuals.

On booking : 5%;

During construction: 45%; and

Balance 50% - 1 year after handover
Construction Update
Jumeirah Golf Estates has awarded the contract
to Al Habtoor STFA Soil Group LLC for the
construction of Al Andalus in October 2015.
Construction work has started and is expected to
be completed before the upcoming EXPO 2020 in
Dubai, solidifying Jumeirah Golf Estates ongoing
24
commitment to delivering the highest quality
properties to homeowners. This appointment
marks the beginning of the next phase of
development for Jumeirah Golf Estates and a first
for the region, combining the luxury lifestyle of a
golf development with mid-market housing.
Q4 2015
25
Q4 2015
OFFICE SECTOR
OFFICE SUMMARY

During 2015, prime office rents remained
broadly stable, while offices in secondary and
tertiary locations recorded a marginal drop of
3% year-on-year. In terms of office sales, values
across major freehold office locations registered
a drop of 13% year-on-year
rates, with owners reducing rents and offering
improved incentives in order to attract tenants
and reduce vacancy rates

The first half of the year witnessed increased
leasing activity in secondary locations of
Business Bay, Jumeirah Lakes Towers and Tecom
C. However, demand weakened from the third
quarter and continued throughout Q4 2015.
An increase in supply, comprising primarily
strata owned space, led to a drop in rental
Current vacancy levels of circa 37% and an
expected addition of 4.5 million sq.ft. of new
space are expected to put further downward
pressure on rents and sales rates during the
course of 2016. However, much of the impact
is likely to be felt across secondary and tertiary
locations which are already struggling to attract
tenants and achieve good occupancy levels,
whilst prime areas with limited new supply are
expected to enjoy stable occupancy levels
DUBAI OFFICE STOCK Q4 2015
Million sq.ft.
100
80
60
10.0
4.5
4.4
6.0
0.2
69
75
81
81
84
91
95
2011
2012
2013
2014
2015
2016
2017
6.0
8.0
6.0
40
20
6.8
2.5
45
51
59
2008
2009
2010
0
Stock
Expected
26
Q4 2015
OFFICE SUPPLY

Over 6.0 million sq.ft. of new office space entered the Dubai
market in 2015, taking the total office stock to circa 90 million
sq.ft.

Approximately 60% of the new supply delivered during 2015
is located in Business Bay, Dubai Design District and Dubai
Investment Park areas which together added 4.1 million sq.ft. of
new office space

years. With the addition of several office properties either
converted to residential or hospitality use over the past two
years and weak demand for strata space, we expect new supply
to shrink further over the course of the next two years

New office space expected to enter the market during 2016,
includes supply from Dubai World Trade Centre district, Onyx
towers on Sheikh Zayed Road and strata space from delayed
projects in the Business Bay and Dubai Silicon Oasis areas
A total of 1.49 million sq.ft. of strata space entered the market
during 2015, representing a considerable drop from previous
OFFICE SALES

Office sale rates across major freehold office locations registered
a drop of 6% quarter-on-quarter and 13% year-on-year. A
combination of increased supply, vacant stock and weak demand
has resulted in a sharp drop in sale rates. Areas such as Jumeirah
Village, Arjan, Dubai Motor City and Dubai Sports City which are
not primarily established as commercial office destinations have
recorded the highest drops in sales rates

Office transactions in both value and volume terms dropped more
than 50% year-on-year, according to data sourced from the Dubai
Land Department. During Q4 2015, over 445,000 sq.ft. of office
space was transacted at a total value of circa AED0.59 billion as
compared to 900,000 sq.ft. of office space with a total value of
AED1.26 billion in Q4 2014

The majority of transactions closed during the last quarter were for
office units measuring less than 2,000 sq.ft. Of the 300 transactions
recorded during the quarter, circa 252 transactions (84%) were for
office sizes of less than 2,000 sq.ft. with a total value of AED264
million for small unit sizes, which strongly indicates the investor
profile is either for new start-up companies or SME’s. A limited
mortgage offering for commercial office space is also impacting
transaction volumes despite a rise in new companies in the Emirate
Jumeirah Lakes Towers and Business Bay, which are relatively
popular in terms of small to medium size offices, have witnessed
a drop in sale enquiries, as end users and investors are adopting
a wait and watch strategy in anticipation of further correction in
sale rates. The majority of enquiries during the last quarter were
from investors seeking income producing space rather than shell
and core or vacant space
OFFICE AVERAGE SALE PRICES Q4 2015
QoQ
-5%
-4%
-9%
-8%
-8%
-3%
YoY
-8%
-11%
-18%
-19%
-13%
-10%
1,100
1,100
AED / sq.ft.
2,500
2,000
1,500
2,250
1,000
1,875
1,550
500
0
Downtown
Dubai
DIFC
Dubai
Marina
Business
Bay
975
Jumeirah
TECOM C
Lake Towers
27
Q4 2015
OFFICE SECTOR
OFFICE RENTS

Office rents in the prime CBD area remained
stable for three consecutive quarters. A lack of
new supply and relatively high occupancy rates
helped maintain stable rents. Average rents
in Downtown Dubai and office towers along
Sheikh Zayed road range between AED110-265
per sq.ft. per annum
However, secondary locations recorded a sharp
drop in rental rates, mainly across new towers
that have been delivered to the market over
the past six months. Strata space owners in the
Business Bay area who were previously quoting
a rate of AED120-130 per sq.ft. per annum
during Q2 and Q3 2015 are now offering the
same space at rents ranging between AED85-95
per sq.ft. per annum (a decline of 25-30%)

An increase in supply combined with weaker
demand is leading to a drop in rental rates
across strata owned developments, whilst single
held assets continue to enjoy high occupancy
and rental rates

With circa 4.5 million sq.ft. of new office stock
scheduled for delivery in 2016, we expect office
rents to remain under stress with secondary and
tertiary locations likely to see a drop in rents
along with increased landlord incentives to entice
new tenants and achieve lower void periods
Jebel Ali Port
The Palm
Jumeirah
DIC & DMC
Dubai
RENT =Marina
AED 120 - AED 175 /sq.ft.
Media / Internet
City
Jumeirah Lake
Jebel Ali Village
The
The
Towers
Greens
TECOM
Gardens
The Meadows
The
Discovery
Lakes
Gardens
JUMEIRAH
LAKE Jumeirah
TOWERS
Islands
RENT = AED 65 - AED 200 /sq.ft. Emirates Hills
Burj Al A
Sheikh Zayed Rd.
She
ikh Z
ayed
Rd.
Jebel Ali
Industrial Area
TO
ABU DHABI
ikh
She
in
dB
me
ha
Mo
Dubai World Central Airport
TECOM C
AVG. SALE = AED 1,100 /sq.ft.
Jumeirah
Park
The Springs
RENT = AED 75 - AED 120 /sq.ft.
Barsha
AVG. SALE = AED Al
975
/sq.ft.
Umm Suqeim Road
Jebel Ali Freezone
Al Sufouh
Jumeirah
Village
d.
ed R
Zay
Jumeirah
Village South
Jumeirah Golf
Estates
Dubai
Investment
Park 1
IMPZ
Jumeirah Golf
Estates
Sh
eik
Dubai
Sport City
hM
oh
am
ed
Bin
Za
Motor
City
Dubai
Investment
Park 2
ye
d
Rd
.
Legen
Dubai
Land
Arabian
Ranches
28
Dubai
Land
Glob
Q4 2015
High
175
120
TECOM C
DIC & DMC
75
120
200
65
70
150
180
110
140
265
340
350
300
250
200
150
100
50
0
175
AED/sq.ft.
OFFICE RENTS AED/sq.ft. Q4 2015
Low
The World
The Palm Deira
Port Rashid
Arab
Al Raffa
DOWNTOWN DUBAI
Jumeirah
Satwa
AlAVG.
WaslSALE = AED 2,250 /sq.ft.
Umm Suqeim
Al Safa
Karama
.
ayed Rd
Sheikh Z
Burj Khalifa
Al Quoz
IndustrialRENT
Area = AED 110 - AED 180 /sq.ft.
Business Bay
Rigga
Emirates Towers
Oud
Metha
Za’abeelAVG. SALE = AED 1,875 /sq.ft.
DIFC
AlRD.
Quoz
SHEIKH ZAYED
DIFC
Port Saeed
Al Qusais
The
BUSINESS BAY
Lagoons
AVG. SALE = AED 1,100 /sq.ft.
Al Marqadh
Al Khail Road
Al Mamzar
Naif
Dubai
Garhoud International
Airport
Festival
City
Ras Al Khor
Nad Al Sheba
TO
SHARJAH
Al
ail
Kh
a
Ro
d
Al Barari
Nad Al
Sheba 2
nds
Dubai
Land
bal Village
Murdif
Dubai
Land
Mushrif
National Park
Sheikh Mohame
d Bin Zayed Rd.
City of Arabia
International
City
29
Q4 2015
RETAIL SECTOR

Despite a slowdown in sales, the retail sector
in the Emirate continues to attract new brands.
Several regional and international brands setup
base for the first time in Dubai during 2015
resulting in consistently high occupancy rates.
Prime retail assets are currently achieving over
95% occupancy rates associated with a long
waiting list of retailers looking to expand or set
base in Dubai
The development which lacked a major
hypermarket also saw the opening of Geant
Hypermarket, an anchor tenant of Dragon
Mart 2
Rents across prime retail centres remained
stable during the year whilst a number of
secondary retail centers that are struggling
to maintain a healthy retail mix witnessed a
drop in rents in the range of 7-10% year-on-year
Dubai’s organised retail stock grew by 8%
year-on-year reaching 34.8 million sq.ft. GLA
(gross leasable area). The only new retail
addition during Q4 2015 was Dragon Mart 2
offering a total GLA of 1.7 million sq.ft. located
in the International City master development.

Over the past two years, the retail market has
witnessed a rise in community retail concepts
due to a rise in population base across new
residential developments. During 2015, several
new community retail centres opened in Majan,
the Villa, Al Waha community and Arabian
Ranches developments adding circa 280,000
sq.ft. of retail space

Retail sales for general goods and services
targeted towards local population are likely
to outperform as compared to luxury goods.
Events such as Dubai Shopping Festival,
Dubai Summer Surprises and Eid in Dubai will
continue to promote sale activity
PRIME SHOPPING MALL AVERAGE RENTS - Q4 2015
Line Shops
Food Court
Restaurants
Flagships
Mini Majors
Hypermarket
Cinema
Anchors
AED/sq.ft.
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0
Note: The rents quoted above are based rents excluding any turnover provisions and service charges
30
DUBAI RETAIL MALLS GLA BY AREA
Q4 2015
2%
6%
8%
Q4 2015
RETAIL SUPPLY PRE-2010
3%
11.3%
22%
6.2%
34.8%
3%
14.1%
4%
10%
5%
4%
14%
10%
33.6%
9%
Deira
Dubai Marina
Mirdif
Jebel Ali
Downtown/Business
Bay
Jumeirah
Bur Dubai
Al Wasl
Barsha
Al Warsan
Dubailand
Other Areas
Community - 2.68 million sq.ft.
Neighborhood - 1.47 million sq.ft.
Regional - 3.35 million sq.ft.
Al Quoz
Sub-Regional - 7.97 million sq.ft.
Super Regional - 8.25 million sq.ft.
DUBAI RETAIL MALLS CLASSIFICATION
Q4 2015
NEW SUPPLY DELIVERED 2010-Q4 2015
23%
31%
31%
30%
15%
16%
21%
15%
18%
Community - 200 - 0.5 million sq.ft.
Neighborhood - 2.48 million sq.ft.
Neighborhood - 0 - 0.2 million sq.ft.
Community - 1.44 million sq.ft.
Regional - 1m - 2 million sq.ft. +
Regional - 1.72 million sq.ft.
Sub-Regional - 500 - 1 million sq.ft.
Super Regional - 2.40 million sq.ft.
Super Regional - 2 million sq.ft.
DUBAI RETAIL MALL STOCK Q4 2015
GLA sq.ft.
50
40
2.1
2.6
3.3
3.3
0.2
0.1
0.0
0.3
31.6
31.8
31.9
31.9
32.1
34.9
38.2
2011
2012
2013
2014
2015
2016
2017
30
20
10
29.5
0
2010
Stock
Expected - *Includes all retail malls with a GLA greater than 25,000 sq.ft.
31
Q4 2015
HOTEL SECTOR
HOTEL SUMMARY

Dubai’s hospitality stock rose by 1.7% from
the previous quarter with an addition of 1,709
new hotel rooms and apartments during
Q4 2015, taking total hotel room count to
circa 97,000 rooms and apartments. All new
properties to enter during the quarter are
first time entrants to Dubai’s ever burgeoning
hospitality market with the inclusion of
Versace, St.Regis, Steigenberger and Hilton
Garden Inn brands

The Dubai’s hospitality market witnessed
rebranding of existing properties, including
the rebranding of a 212 room Metropolitan
Palace hotel to Carlton Palace hotel and 471
room Radisson Royal Tower to Nassima Royal
hotel

With supply out stripping demand, the
hospitality sector continues to record a
decline across all key performance indicators.
Although the number of tourists into the
Emirate continues to rise by 8% year-on-year,
the rise in room supply is having a negative
impact on hotel trading performance.
Overall, occupancy levels for the full year
2015 dropped by 3% while ADR’s dropped by
10.2% compared to the same period last year
Around 43% of new supply falls under the four
star rating with the opening of three Garden
Inn brands from Hilton, with properties
located in Mina, Muraqabat and Mall of the
Emirates accounting for a total of 735 rooms.
Five star hotel rooms accounted for the other
974 rooms, located within Palazzo Versace,
St.Regis and Steigenberger hotels
No. of Rooms ('000s)
PRIME HOTEL ROOMS SUPPLY (2012-2017)
120
100
80
8
1
4
79
80
84
2012
2013
2014
60
40
7.5
92
97
2015
2016
8.0
104
20
0
Existing Supply
32
4.7
New Supply
2017
Q4 2015
60%
40%
Occupancy
100%
1,200
1,000
800
600
400
200
0
0%
Jan-14
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan-15
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
AED
DUBAI HOTELS PERFORMANCE - YTD 2015
ADR
Occupancy
RevPAR
HOTELS - NEW SUPPLY Q4 2015
HOTEL NAME
LOCATION
STAR
DATE
NUMBER OF KEYS
Muraqabat
4 Star
Q4 2015
183
Culture Village
5 Star
Q4 2015
204 rooms +
169 residences
Business Bay
5 Star
Q4 2015
367
Sheikh Zayed Road
5 Star
Q4 2015
234
LOCATION
STAR
DATE
NUMBER OF KEYS
Ibis Style
Dubai International
City
3 Star
Q1 2016
246
Ibis One Central
Dubai World Trade
Centre
3 Star
Q1 2016
588
The Address Boulevard
Downtown Dubai
5 Star
Q2 2016
200
Palm Jumeirah
5 Star
Q2 2016
292
Hilton Garden Inn
Palazzo Versace
Steigenberger Hotel
St. Regis
SAMPLE OF UPCOMING SUPPLY
HOTEL NAME
Dusit Emirates Saray
33
Q4 2015
DEFINITIONS & METHODOLOGY
RESEARCH STUDY AREA
The geographic extent of the study area covers the
key districts in Dubai.
RESIDENTIAL
New residential developments are classified as
delivered and thus entered into the new supply
category when they are made available for
occupation. This is verified via a combination of
site inspections and discussion with the developer
and hence our supply numbers do take into
consideration the phased release of large projects.
Rental and sales trend analysis is based on
transactional data derived from the MPM
Properties Agency team and data sourced from
developers and owners.
OFFICES
New office developments are classified as delivered
and thus entered into the new supply category
when they are available for tenant fit-outs.
Given the general lack of transparency in the
local market rents quoted are headline rents, thus
exclude any rent free period of other financial
incentives that may have been negotiated between
the parties. The rents quoted are also exclusive of
service charges.
RETAIL
New retail developments are classified as delivered
and thus entered into the new supply category
when the first units are open and trading.
Our classification of malls is based on our
own assessment having regard to size and
the catchment area which the mall typically
penetrates.
HOSPITALITY
New hotels are classified as delivered and thus
entered into the new supply category when they
are opened and trading. All trading performance
data is provided by DTCM.
FUTURE SUPPLY PROJECTIONS
Our future supply projections across all sectors are
based on a combination of regular site inspections
and discussions with developers.
BESPOKE CLIENT RESEARCH
ADDING VALUE TO YOUR PROPERTY INTERESTS
The ADIB Real Estate Services team covers all
sectors of the real estate market. We provide
bespoke market research to our valued clients to
meet their specific requirements.
We provide reports, information and presentations
derived from primary market data that directly assist
our clients to save or make money from real estate
and shape strategies to enhance value.
DISCLAIMER:
The information contained in this report has been obtained
from and is based upon sources that MPM Properties believes
to be reliable, however, no warranty or representation,
expressed or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted
subject to errors, omissions, change of price, rental or other
conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals. MPM Properties
will not be held responsible for any third-party contributions.
All opinions and estimates included in this report constitute
MPM Properties, as of the date of this report and are subject
34
to change without notice. Figures contained in this report are
derived from a basket of locations highlighted in this report
and therefore represent a snapshot of the Dubai market.
Due care and attention has been used in the preparation
of forecast information. However, actual results may vary
from forecasts and any variation may be materially positive
or negative. Forecasts, by their very nature, involve risk
and uncertainty because they relate to future events and
circumstances which are beyond MPM Properties’ control.
For a full in-depth study of the market, please contact MPM
Properties team.
Q4 2015
A collaborative team providing
our integrated services
PAUL MAISFIELD BSC (HONS) MRICS
CEO
T: +971 (0)2 610 0545
M: +971 (0)50 660 9437
[email protected]
YOUSEF AL ZAROONI
Regional Head – Al Ain
T: +971 (0)3 708 8636
M: +971 (0)50 600 1002
[email protected]
ABDULLAH SAID AL KUWEITI
Business Development Director
T: +971 (0)2 610 1554
M: +971 (0)50 623 5854
[email protected]
ALI ABDULLAH ABDUL RAHMAN
Acting Regional Head – Northern Emirates
T: 971 (0)6 597 2514
M: +971 (0)50 656 2486
[email protected]
VAIBHAV SHARMA MCOM; MDBA
Director of Strategic Advisory and Research
T: +971 (0)2 412 8914
M: +971 (0)50 660 9295
[email protected]
SAMUEL MORRIS BSC (HONS) FRICS
Director of Valuation & Regional Head - Dubai
T: +971 (0)4 371 9466
M: +971 (0)50 107 1704
[email protected]
FRANK O’DWYER MBA (Hons); BEng.
COO
T: +971 (0)2 610 0402
M: +971 (0)50 812 1070
[email protected]
DOMINIC BARLOW
Head of Retail, Hospitality & Leisure
T: +971 (0)2 510 0655
M: +971 (0)56 288 1458
[email protected]
VINEET KUMAR
Director of Agency – Dubai
T: +971 (0)4 371 9462
M: +971 (0)50 651 6491
[email protected]
MOHAMMED FAHEEM
Manager Strategic Advisory & Research
T: +971 (0)4 371 9471
M: +971 (0)50 384 5220
[email protected]
WAHIDA KARAMA
Head of Property Operations
T: +971 (02) 610 0435
M: +971 (0)50 765 7679
[email protected]
JUBRAN AL HASHMI
Head of Property Services
T: +971 (0)2 610 0232
M: +971 (0)50 122 0041
[email protected]
BALAJI NAGARAJ MSC MRICS
Head of Residential Valuation
Dubai & Northern Emirates T: +971 (0)4 371 9463
M: +971 (0)55 196 2396 [email protected]
MOHAMED AL ZOUBI
Head of Development Advisory
BSc Civil Engineering
T: +971 (0)2 610 0564
M: +971 (0)50 310 3570
[email protected]
35
Q4 2015
SUPPLY - PHOTO GALLERY
NEW SUPPLY – Q4 2015
SAMPLE OF UPCOMING PROJECTS
RESIDENTIAL
RESIDENTIAL
1
AJMAL SARAH
2
WASL OASIS II
3
4
QASR AL SABAH
KENSINGTON
MANOR
ONE JLT
2
ffvvc
3
DUBAI DESIGN DISTRICT – PHASE 3
WESTBURY
SQUARE
4
OPTIMA 1
RETAIL
1
36
5
2
DRAGON MART 2
HILTON GARDEN
INN
6
INDIGO SPECTRUM 2
7
SAFEER TOWER 1
8
VOLANTE
BUTTER FLY
6
ONYX TOWER
7
THE EXCHANGE
8
THE EDGE
4
CITY WALK - PHASE 2
RETAIL
THE RIBBON
MOTOR CITY
3
THE POINTE
PALM JUMEIRAH
HOTEL
HOTEL
1
AL KHAIL HEIGHTS
OFFICE
OFFICE
1
5
2
PALAZZO VERSACE
3
STEIGENBERGER HOTEL
4
ST. REGIS
5
IBIS - DWTC
6
THE ADDRESS BOULEVARD
DOWNTOWN DUBAI
7
DUSIT THANI
PALM JUMEIRAH
8
IBIS STYLE
INTERNATIONAL CITY
Q4 2015
The World
Q2 2014 NEW SUPPLY
4
4
CONSTRUCTION
Q4 2015UNDER
NEW SUPPLY
UNDER CONSTRUCTION
The
Palm Deira
Residential
ResidentialResidential
Residential
Offices
Offices
Offices
Offices
Retail
Retail
Retail
Hotels
Hotels
Retail
Port Rashid
Hotels
Hotels
The Palm
Jumeirah
Burj Al Arab
Dubai Marina
Media / Internet
4 City
3
Jumeirah Lake 3
The
The
Towers
Greens
TECOM
rdens
The Meadows
The
scovery
Lakes
ardens Jumeirah
Islands
Emirates Hills
2
Al Barsha
2
IMPZ
Karama
3
Burj Khalifa
Al Quoz
2
1
3
DIFC
Oud
Metha
1
Port Saeed
2
1
Business Bay
2
Rigga
Emirates Towers
2
Za’abeel
4
1
2
Al Qusais
The
Lagoons
Dubai
Garhoud International
Airport
Al Khail Road
1
Al Marqadh
Jumeirah
Village South
Sh
eik
Dubai
Sport City
hM
oh
Festival
City
ed
Ras Al Khor
Nad Al Sheba
am
Bin
Za
d
a
Ro
3
Rd
.
il
ha
Motor
City
ye
d
Al Barari
Nad Al
Sheba 2
Legends
Dubai
Land
TO
SHARJAH
K
Al
Jumeirah Golf
Estates
Al Quoz
Industrial Area
4
1
1
Rd.
Al Mamzar
Naif
Satwa
Al Wasl
Al Safa
ayed
Sheikh Z
The Springs
Jumeirah
Village
eirah Golf
Estates
Umm Suqeim
Al Sufouh
Umm Suqeim Road
Jumeirah
Park
Al Raffa
Jumeirah
Arabian
Ranches
Dubai
Land
Sheikh Mohamed
Dubai
Land
Global Village
Murdif
Dubai
Land
Bin Zayed Rd.
3
4 4
International
City
City of Arabia
3
Dubai
Silicon Oasis
Dubai
Land
1
TO
AL AIN
Dragon
Mark
TO
HATTA & OMAN
Mushrif
National Park
Investment
Advisory
Research &
Strategic
Advisory
Property
Management
INTEGRATED
SERVICES
COVERING THE
FULL PROPERTY
LIFECYCLE
Agency
(Sales & Leasing)
Valuation
Project Management
and ESCROW
PAUL MAISFIELD BSC (HONS) MRICS
CEO
T: +971 (0)2 610 0545
M: +971 (0)50 660 9437
[email protected]
VAIBHAV SHARMA MCOM; MDBA
Director of Strategic Advisory and Research
T: +971 (0)2 412 8914
M: +971 (0)50 660 9295
[email protected]
ABU DHABI HEAD OFFICE
DUBAI OFFICE
AL AIN OFFICE
SHARJAH OFFICE
6th Floor, Al Wahda Tower
P.O Box 114686
Abu Dhabi
Office 004 - Level 100
Arenco Tower, Dubai Internet City
Dubai
201-204 ADIB Ladies Branch Building
Oud Touba Street
Al Ain
AL Ikhlas Tower
AL Khan
Shajrah
Tel. +971 2 610 0252
Fax. +971 2 610 0514
Tel. +971 (0)4 371 9462
Tel. +971 (0)3 703 9521
Tel. +971 (0)6 597 2555
www.mpmproperties.ae